Egyptian President Honsi Mubarak says Israel should seize a "historic chance" for peace with Arab nations. Mr. Mubarak made the comments in a speech marking the 50th anniversary of a coup that overthrew the country's British-backed monarchy.

President Mubarak said Israel will be the ultimate loser if it continues its occupation of Palestine. He said Israeli policies "serve to foster Arab extremism and increased hatred against Israel."

The Egyptian leader also said Israel will gain nothing by calling for the ouster of Yasser Arafat, the elected leader of the Palestinians. And he said Israel will not be helped by what he called the occupation, killing, and blockading of the Palestinian people. He added that Israel must enter into serious talks about the formation of a Palestinian state, a development that he said would provide the best formula for peace in the region. He paid special tribute to people involved in the coup that overthrew the monarchy in 1952. He said one of the coup leaders, Gamal Abdel Nasser, who later became Egypt's second president, and his successor, Anwar Sadat, were the catalysts of national reform.

President Mubarak said the Egyptian revolution of 50 years ago sought reform through flexible approaches rather then remaining ridged. He said the revolution implemented fundamental principals of justice, equity and comprehensive development for the good of the country. The Egyptian leader made the speech to this year's graduating class at a Cairo military academy.

Libyan leader Muammar Gadhafi was the only foreign guest at the ceremony. Colonel Gadhafi and one of the Egyptian officers involved in the coup in 1952, Zakariah Mohiedin, were honored with commemorative medals.